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Federal and state marketplace updates - August 9, 2016

CMS Implements Measures to End Marketplace Financial Assistance for Consumers Dually-Enrolled in Medicaid/CHIP

CMS announced a new process by which it will end advance payments of premium tax credits (APTCs) and cost-sharing reductions (CSRs) when a consumer is found to be dually enrolled in Marketplace coverage with APTCs/CSRs and Medicaid or CHIP. Beginning August 2016, dually-enrolled consumers will receive an initial notice indicating they may no longer be eligible for APTCs/CSRs because they have other minimum essential coverage. Individuals will be instructed to either update their Marketplace application to reflect that they are not dually enrolled or end their Marketplace coverage with APTCs/CSRs. If the dually-enrolled consumer fails to take these steps, CMS will send a second and final notice at least 30 days after the initial notice to notify the enrollee that the Marketplace will terminate APTCs/CSRs.

A new study from The Commonwealth Fund has found that insurers often exclude health services for conditions that disproportionately affect women, despite ACA regulations intended to eliminate gender-based discrimination in insurance markets. The authors examined qualified health plans from 109 insurers across 16 states and identified six types of frequently excluded services: treatment of conditions resulting from non-covered services; maintenance therapy; genetic testing; fetal reduction surgery; treatment of self-inflicted conditions; and preventive services not covered by law. These exclusions disproportionately impact women for several reasons, including: women are underrepresented in the medical research insurers use to make coverage determinations; women are more likely to have a chronic health condition; and women often rely on genetic testing as a screening tool. In response to their findings, the authors suggest regulators prohibit variations within essential health benefits benchmark plans and require transparency in plan documents so that women better understand their coverage.

Two More CO-OPs Sue Federal Government Over Risk Adjustment Program

Two of the remaining seven ACA CO-OPs, Minuteman Health, which offers plans in Massachusetts and New Hampshire, and New Mexico’s Health Connections filed suits in federal court challenging the formula used to determine payments made under the ACA’s risk adjustment program. The CO-OPs argue that the current program, which is intended to mitigate adverse selection and stabilize premiums, favors larger insurers and does not include relevant factors contributing to premium differentials. Under the program, Minuteman is required to pay $16.7 million and New Mexico Health Connections is required to pay $14.5 million. The suits join a similar one filed in June by Maryland's Evergreen Health CO-OP.

California: Undocumented Immigrants Would Be Eligible to Purchase “CQHPs” on Marketplace Under Proposed 1332 Waiver

Covered California’s (the State-based Marketplace) draft 1332 waiver proposal would allow undocumented immigrants to purchase non-subsidized health insurance through a new option on the Marketplace called California Qualified Health Plans (CQHPs). CQHPs would be identical to Covered California’s qualified health plans, and issuers would be required to offer both types. Covered California estimates that 17,000 undocumented immigrants—less than 1% of the State’s individual market—would take up coverage through the plans. If the waiver is approved, open enrollment for the CQHPs will begin in November 2018 for coverage beginning January 1, 2019, and California will become the first state to allow undocumented residents to purchase coverage through the ACA’s Marketplaces with their own funds.